a. advise the
Committee about the main aspects of the Government’s proposal to introduce
legislation to create Urban Development Authorities (UDAs) to support and fast
track urban development projects across New Zealand and the implications of
this proposal for Hutt City and Council;

b. ask the
Committee’s to approve the draft submission (attached as Appendix I) on the
proposal.

Recommendations

That the Committee approves the draft submission on the Government’s proposal to
introduce legislation to create Urban Development Authorities (UDAs) to
support and fast track urban development projects.

Background

2. Recently, the
Government announced it will introduce legislation to create Urban Development
Authorities (UDAs) that will support and fast-track urban development projects
across New Zealand. UDAs are intended to widen Government powers (both central
and local) to play a more active role in identifying, planning and delivering
strategic urban redevelopment projects.

3. UDAs have existed worldwide for some time. The Australian Federal Government established
and resourced a Major Cities Unit within the Department of Infrastructure,
Transport, Regional Development and Local Government in 2008 to provide a more
coordinated and integrated approach to urban development.

4. In recent years, some state governments in
Australia (New South Wales, Victoria) have established growth management
agencies that work closely with their Departments of Planning to manage the
planning and infrastructure co-ordination for the release of land areas for
development around major cities. Growth boundaries are used by those state
governments to manage urban growth through infill and intensification, and at
the city boundary.

5. In the UK, English Partnerships is the national
regeneration agency, helping the Government to support high-quality sustainable
growth in England. It is responsible for land acquisition and assembly, and
major development projects, alone or in joint partnership with other agencies
and with private sector developers. The Housing Corporation is the national
government agency that funds new affordable housing and regulates housing
associations in England.

6. In England, Urban Regeneration Companies are
independent companies established by the relevant Local Authority and Regional
Development Agency (which has an economic development focus on a regional
level), with the aim of uniting public and private-sector partners. They work
alongside English Partnerships and other local stakeholders including
employers, amenity groups and community representatives. These Urban
Regeneration Companies have proved successful in attracting private investment
into targeted areas and in coordinating economic development delivery and
funding.

7. An outline of
the key aspects of the proposal is attached as Appendix I and the draft
submission is attached as Appendix II.

8. Council’s Urban
Growth Strategy has a target of 6000 new homes by 2032. Establishment of a UDA
within Hutt City would be one tool to assist in achieving this target.

9. The Government is calling for submissions which are due on the 19th
May 2017. No hearings will be held. Submissions will be analysed and reported
back to the Minister and new legislation will be drafted.

Discussion

10. The key focus of the document is widening
Government powers – both central and local – to play a more active role in
identifying, planning and delivering strategic urban redevelopment projects.
The desired outcome is making cities more connected and sustainable with a
wider range of housing – including more affordable options – while supporting
quality living environments across the housing continuum.

11. It is generally accepted that UDAs, if
implemented appropriately, can make a big difference to New Zealand’s future.
The proposal offers a “toolbox” of powers that could be vested in an UDA for
the purposes of progressing urban development that can accelerate the building
of new communities and support the revitalization of existing urban areas to
deliver “vibrant places to live and work”. The range of these powers is broad -
from streamlined planning to compulsory acquisition of private and public land.

12. Not every development will require all the
powers to be vested in a UDA – it will only involve those powers needed to
successfully complete the development. Once completed, ownership of
infrastructure assets are vested back to the local authority in which the
development took place or another agency as appropriate. Provision is made for
ensuring that the receiving organisation does not inherit debt or have to
purchase the assets vested in it. This makes adherence to performance and
design standards imperative. There is no provision for the funding of renewals
and on-going maintenance.

13. Proposed matters of relevance included in the draft include:

Level of central government control

a. Central government will have a very high level
of control of decisions affecting development in local environments - the
Minister has final decision making powers vis a vis an urban development proposal.

b. The impact on Council
decision making independence or on Council’s ability to influence if government
decides to introduce legislation that does not require local authority
agreement particularly at the planning and development stage.

c. Council’s ability to meet its responsibilities under the Local
Government Act in terms of section 10 “Purpose of Local Government” and section
11A “Core services to be considered.”

d. The rate payers and residents interests and ability to provide
feedback on proposals.

e. The proposal includes a local government
ability to veto any proposal should it believe that it isn’t in its
constituent’s interests to approve. However, this can be overridden where the
government is of the view that the development is in the national or regional
interest. This is an attempt to circumvent national or regional “nimbyism”.

Council’s current ability to influence/guide development
in the city – will a UDA make a difference?

a. Difficulties, if any, in ensuring that the
market delivers infrastructure and intensification projects that will provide
significant numbers and types of new dwellings to a level of quality that
ensures the creation of a vibrant a sustainable city.

b. Whether our growth aspirations are likely to
occur and if they are what that means for urban intensification in Lower Hutt.

c. Council’s focus on urban redevelopment and
providing a greater choice for housing.

d. The lack of a spatial plan and the impact this
might have on our ability to develop proposals for Government to consider
granting development powers to a Council-established UDA. Officers recommend
Council give serious consideration to developing a spatial plan for the city.

Other
issues

a. Compensation and powers of compulsory
acquisition. Good compensation packages are critical to the success of the
proposal and people need to understand what is available to them. It is far
more productive if people come willingly to the negotiation table because they
can see the advantage to them of doing so. Officers view is that providing the
UDA with sufficient flexibility to design compensation packages that will
benefit both the building/land owner, the UDA and ultimately ratepayers is
essential.

b. Taking of public land for UDA purpose. This
goes to the inability of rate payers and residents to have involvement in the
process of deciding whether or not to use public land such as a reserve for
development purposes. The process for doing this needs more rigour around it.

c. Shifting planning and land use controls
outside District Plans. While the streamlining of processes is an important
aspect of ensuring that developments can be easily progressed, officers are not
convinced that the argument made for this is persuasive. Officers see no reason
why the master plan (and associated rules for stream lining the consent and
decision making process) for a development could not be included in an existing
District Plan. Shifting the planning outside the District Plan could result in
parallel processes and inefficiencies for both the UDA and the “host”
Council.

The ability
to override one or more of the existing District Plan, regional plan and
applicable regional policy statements “risks the creation of yet another fast
track or streamline pathway with its own administration and rules and further
fragment what is already at risk of becoming an extremely fractured and
inefficient planning system” (NZPI, Preliminary Analysis of NZ Government’s
Urban Development Authorities Discussion Document 9/3/2017). It also
removes the ability of rate payers and residents to participate in planning
processes. There seems to be no cogent reason for bypassing or replacing
existing RMA processes.

d. Value uplift or betterment fee/levy system.
The proposal does not support the use of value uplift or betterment fee/levy
systems in New Zealand although overseas these tools have proved effective for
specific, local projects that can be completed in the short term (NZPI).

These
approaches have been used in New Zealand (Wellington) before. The rationale
for limiting the UDA funding proposals does not engage with the function of
value uplift potential revenues in buying the agreement and participation of stakeholders
in the kind of land acquisition processes suggested in the Discussion Document.

Our view is
they can be useful but should be included as an option for UDAs not as being
compulsory.

14. Central
government can develop a proposal separate from the TA however it must have the
TA’s prior approval of the projects strategic objectives before granting
development powers to a UDA. This is where the local authority power of veto
comes in. It should be noted however, that the proposal does suggest that
local authorities should not be involved and should not have a
power of veto. This suggestion should be strongly resisted

15. The proposal to
introduce UDAs to New Zealand has potential to assist local authorities to
develop urban renewal projects that can improve the city’s urban fabric and
catalyse further private development.

16. Council could stand to gain large development outcomes it couldn’t
hope to achieve on its own by working alongside and utilising central
governments resources and powers under the UDA provided Council was in
agreement that it could be beneficial.

17. Overall this legislative change has potential opportunities that
could benefit Council.

Other
Councils

18. Wellington City
Council considered establishing a UDA in 2016. Councillors were generally
supportive of the proposal however their preference was for the UDA to be
in-house rather than at arm’s length as a CCO or CCTO. Officials on the other
hand recommended that the UDA be a CCO or CCTO.

19. WCC has recently
decided (21 April 2017 Dominion Post) that
the council can do a better job on its own, and has brought the work back
in-house.

Options

20. The Committee has
the options of:

a. Approving the
draft submission without changes; OR

b. Approving the
draft submission subject to changes required by the Committee being made; OR

c. Not approving
the submission and asking officers to undertake further work and come back to a
subcommittee for approval. The subcommittee being the Chair and Deputy Chair
of the Policy and Regulatory Committee; OR

d. Not approving
the submission because the Committee does not believe it is appropriate for
Council to make such a submission.

Consultation

21. Officers from
relevant areas of Council were consulted in the development of this submission.

22. Councillors had a
workshop with officials from MBIE on 27th April to provide
Councillors with information on the UDA proposal and enable questions for
clarification.

Legal
Considerations

23. There are no
legal considerations at this stage. However, the
consequential legislation could create relatively significant legal
considerations for Council in the long term although these are unknown at
present.

Financial Considerations

24. At the moment, there are no significant financial implications in making
a submission. However, the consequential legislation could create relatively
significant financial considerations for Council in the long term although
these are unknown at present.

Other
Considerations

25. In making this
recommendation, officers have given careful consideration to the purpose of
local government in section 10 of the Local Government Act 2002. Officers
believe that this recommendation falls within the purpose of the local
government in that it provides Council with advice on an important development
in the legislation affecting the operation of Local Government. It does this in
a way that is cost-effective because it there is limited cost associated with
making a submission to Government and it is in the city’s best interests that
Council is involved in decision making concerning legislation to introduce
Urban Development Authorities.